Andrew Dixon said he hoped his departure as chief executive of Creative Scotland would help heal the rift between the body and leading artists.

In a joint letter sent in October, more than 100 artists and writers, including John Byrne, Alasdair Gray, James Kelman, AL Kennedy and Ian Rankin, attacked the management and running of the body.

The quango had informed 49 groups – including the Federation of Scottish Theatre, the Scottish National Jazz Orchestra and the Edinburgh Mela – their regular funding would end next spring.

Instead they would have to apply for money for one-off project. Anger deepened last month when it emerged Creative Scotland had given grants for a series of "ludicrous" schemes last year, including kite flying and a song for Edinburgh's pandas.

The quango is undertaking two internal reviews aimed at improving its operations and relationships with artists. It has an annual budget of more than £75 million funded by the Scottish Government and National Lottery.

Mr Dixon, who was paid £130,000 last year, will stand down at the end of January. In a statement, he insisted he was proud of his record in charge of the quango since it was created by a merger between Scottish Screen and the Scottish Arts Council.

He thanked Fiona Hyslop, the SNP Culture Minister, for her “tireless support” but added: “I have been disappointed, given my track record, not to gain the respect and support of some of the more established voices in Scottish culture and I hope that my resignation will clear the way for a new phase of collaboration between artists and Creative Scotland.”

Mr Dixon was appointed acting director in February 2010 before becoming full-time in May that year overseeing the creation of the new quango. He insisted last month that he would not quit.

Creative Scotland said his exit package was still being negotiated but Sir Sandy Crombie, the body’s chair, praised him as a “vociferous champion and advocate for Scottish arts and culture.”

Ms Hyslop said: “His energy and enthusiasm have been key to establishing Creative Scotland as Scotland's national arts body.”